Bangor panel faces question of when city should take dozens of tax-delinquent properties

The property located at 11 Field Street in Bangor. Bangor officials are looking for changes to crack down on people who are behind in taxes. There are 117 matured liens in the city, accounting for about 1 percent of the city's accounts. Of those, 49 are at least 5 years behind; some haven't paid in more than 15 years.

BANGOR, Maine — City councilors directed staff Monday night to start the process of taking posession of two properties whose owners are more than five years behind on taxes — and more takeovers could be coming.

The move came during a Finance Committee meeting, where councilors discussed a potential crackdown on owners who haven’t paid up in spite of the city’s efforts to work with them on developing a payment plan.

Of the city’s 10,743 taxed properties, 117, or a little more than 1 percent, have matured liens against them, according to David Little, deputy treasurer and the city’s tax collector. It typically takes two and a half years of delinquency for a lien to mature. Legally, the city already owns those properties with matured liens, but it has seldom chosen to take possession of them in the past, Little said.

Of those 117, 49 are more than five years overdue and 13 are more than a decade behind.

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“We’ve talked about this off and on for quite awhile, and we need to make some definite policy decisions,” Councilor Patricia Blanchette, chairwoman of the city’s Finance Committee, said Monday.

In all, 1,252 liens have been filed against 612 properties in the city. The total due for all liens is just over $2.4 million, but there’s little the city can do to enforce collection until a lien has matured, Little said. Typically, the city works with owners to develop some sort of payment deal and the issue is resolved before two and a half years passes.

The city is focused on the list of 49 properties that are more than five years behind in payments. The amount owed varies widely, from a few hundred dollars to nearly $50,000. With interest and fees, the owners of properties with matured liens owe the city more than $897,000, according to Little.

City councilors directed city staff to start the process of taking over two properties on the list of 49 during a Monday night Finance Committee meeting. In one situation, the owner of 177 Pearl St., a vacant building owned by a woman who owes nearly $34,000, volunteered to hand her deed over to the city. Little said he believes the city could fix up the property, which is assessed at $82,000, recoup the lost taxes and turn a profit. Selling the building would put it back in the taxable market.

In the second takeover, city staff will seek out the owners of 11 Field Street to notify them that the city plans to take possession of a building that has been vacant for at least two years. Neighbors at Monday’s meeting said the building was “a disaster waiting to happen,” and that it draws squatters and trespassers

That home is blighted and laden with asbestos, according to the city. It would cost tens of thousands of dollars to remediate and demolish, leaving behind a vacant lot that likely would have far less value than the cost of making the property or land livable again. It might be unwise for the city to get involved in that sort of business, Blanchette argued.

City councilors said Monday that they want to target more of these 49 properties that are five years overdue.

“I don’t think we should be shrugging off unpaid property taxes,” Councilor Ben Sprague said. “These are the dollars we use to pay our policemen, firemen and teachers. These are the dollars we use to fix our roads and repair our playground equipment. When a person does not pay their taxes, it means everyone else has to pick up the slack. It also sends the message to the people who do pay their property taxes that they are suckers for doing the right thing. The fact that the city does not aggressively go after those who are delinquent sends the message that we don’t care.”

Little will go back to the list and attempt to identify which properties on the list of 49 are abandoned and get details about the stories behind them. He’ll bring his findings back to the Finance Committee in four weeks, when councilors will discuss whether the city wants to ramp up enforcement or make changes to its policy.

Historically, the city has been hesitant to take over properties, according to Little and councilors. The city’s policy is to “collect, to the greatest extent possible, all real property taxes and sewer charges which are due in a timely fashion,” and to take possession of the properties as a “last resort” when efforts to work with the owners fail, according to policy documents. The city can take such action when a building is abandoned, dangerous or when it is “determined that doing so is in the best interests of the city and its residents.”

Officials face balancing interests when determining whether to take over a property. On the one hand, by taking a property from a delinquent owner, that building and land can be placed back on the tax rolls and mean more assets for the city. On the other, taking over a property in particularly rough shape could cost the city substantial money and leave it with little of value.

Councilor James Gallant said Monday that the city has had some successes in the past with taking over properties and flipping them back into the taxable market. For example, in 2012 the city took over 55 Grant St., a dilapidated single-family home on a 5,000-square-foot lot, and put out a request for proposals to overhaul the building, which was blighted but in “manageable shape,” according to Gallant.

Little said the city typically has a 97-98 percent tax collection rate, which falls in line with other Maine cities. In spite of the unpaid taxes on these 117 properties, the city still manages to meet and exceed its annual tax commitments, he said. Last year, the city’s tax levy was nearly $22.5 million.

Staffing limitations hinder Little’s team’s ability to get on the phones to try to track down owners who haven’t been paying, and paper notices can go unnoticed or ignored. The city’s collection rate today is about the same as it was when it had a full-time clerk dedicated to collections.

Gallant said he brought up concerns about nonpayment of taxes last year after learning that some owners hadn’t paid in nearly two decades.

“People allow emotion to play into these things, when ultimately we have rules and guidelines to follow,” Gallant said. “I don’t want to go out and take anyone’s property, but at what point do you say, ‘Enough is enough?’”